Leading policy-makers and scholars explain how market forces, deregulation, and consumer choice can work to improve health care for all Americans.


Commentary: In search of the next old thing - The copycat culture of America's drug industry
Marcia Angell, The Star-Ledger, 8-22-04

For a more detailed engagement with Marcia Angell's new book, see book review by Henry Miller. But briefly, there are two main points to Angell’s argument.

The first is that truly innovative drugs are largely developed through government funded research, not industry. The second is that the pharmaceutical industry deals in copycat drugs that are minimally, if at all, different from older (and cheaper) drugs already on market. Her solution to both problems: the FDA should force pharma companies to test new drugs and old drugs in head to head clinical trials before allowing new treatments on market. She argues that this would lower the price of drugs and force companies to create truly innovative medications.

If the first was true, why don't we see a blizzard of new drugs for all of the orphan diseases that industry doesn't see a viable market for? After all, nothing prevents government from coming up with innovative treatments for those diseases. Government doesn't do that (and won't) because drug development is tremendously difficult and expensive. Governments know that most of their efforts in these areas would go for naught, and so they don't bother. Taking private industry to task for not doing something that even governments (with their vastly larger resources) don't do is not only unfair, it misses the point.

Drug development is complex, expensive, unpredictable and time consuming—to the tune of about $800 million dollars and 10 years per product that actually reaches the market. If governments had to shoulder those costs global drug development would freeze in its tracks. Solving the problems that Angell complains about when it comes to orphan diseases or anti-infectives, or the sixth statin drug on market, would mean improving the drug discovery process, streamlining regulations, and making it easier for companies to move innovate products through the pipeline – subjects about which Angell has nothing to say.

So, in this immensely difficult financial and regulatory environment imagine going to potential pharmaceutical investors and telling them that from henceforth not only could they waste hundreds of millions of dollars and years of researcher time on a single new product, but, at the end of it, even if they had a workable drug that did benefit patients (thank God!) they would now have to test their candidate against a competitor's drug, or a generic, and that if it wasn't better (Significantly? A little bit? Somewhat?) the FDA would tell them to flush it down the drain.

As an investment vehicle, that doesn’t even pass the laugh test.

Pharmaceutical innovation depends on generating profits on products, and if Marcia Angell wants to kill innovation there is no surer way of doing so than killing profits. Anyone who doubts this point should look at the track record of European based pharma companies, which have become increasingly less innovative as price controls took hold there.

What would patient health look like if you remove the profit motive from pharmaceutical investment? Again, look at Europe. The National Health Service in Britain has price controls on prescription drugs and strictly limits access to new drugs – and has the highest cancer mortality rates in the developed world. Is that the kind of innovation that Angell wants to inflict on American patients?

Project FDA.
home   spotlight   commentary   research   events   news   about   contact   links   archives
Copyright Manhattan Institute for Policy Research
52 Vanderbilt Avenue
New York, NY 10017
(212) 599-7000